Which of the Following Explanations for the Negative Slope of the AD

question 56

Multiple Choice

Which of the following explanations for the negative slope of the AD curve is correct? A fall in the price level,with an unchanged money supply,causes the transactions demand for money to

• A)decrease,shifting the MD curve downward,lowering the interest rate and increasing desired investment,causing the AE curve to shift upward.
• B)decrease,shifting the MD curve upward,raising the interest rate and increasing desired investment,causing the AE curve to shift upward.
• C)increase,shifting the MD curve upward,raising the interest rate and decreasing desired investment,causing the AE curve to shift upward.
• D)increase,shifting the MD curve downward,lowering the interest rate and decreasing desired investment,causing the AE curve to shift downward.
• E)increase,shifting the MD curve upward,raising the interest rate and decreasing desired investment,causing the AE curve to shift downward.

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Definitions:

Safety Measures

Actions or procedures designed to minimize or prevent harmful or unsafe incidents.

Imperialism

A policy of extending a country's power and influence through colonization, use of military force, or other means.

Activist

A person who actively advocates for, works towards, or supports a cause or policy aimed at social, political, economic, or environmental change.

Wealth

The abundance of valuable resources or material possessions, which can include assets like property, investments, and cash.